Moody's lowers Liz Claiborne

Moody's Investors Service said it downgraded Liz Claiborne Inc.'s €350 million senior unsecured notes to Baa3 from Baa2 and its commercial paper to Prime-3 from Prime-2.

The outlook is stable. This concludes a review initiated on May 1.

The rating downgrade reflects Moody's expectation that the company's performance is unlikely to recover to levels appropriate for the Baa2 rating category in the intermediate term, the agency said. The rating also considers uncertainty about execution of management's long term strategic growth plans, according to Moody's.

The stable rating outlook reflects Moody's expectations of a recovery from the weaker performance expected for the current fiscal year, the agency said.

The rating and outlook expect the company to maintain financial policies consistent with its historical practice of funding share buybacks and acquisitions through free cash flow, Moody's said.

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